The 2025 proxy season was as volatile as any in recent memory. Activity was robust at the beginning of the year, slowed considerably after the April 2 tariff announcement, and was interrupted by surprise changes proposed by the SEC regarding investor engagement practices that prompted institutional investors to reassess their engagement strategies. According to FactSet, the number of campaigns launched by activist shareholders remained relatively consistent with the market’s 10-year average, but the tone and tenor of the campaigns was quite chaotic. Ultimately, the number of Board seats obtained by activists exceeded last year’s total, including an increase in Board seats activists won in proxy fights that went to a vote. Engagement dynamics are changing.

Looking ahead, we believe that conditions are in place for activists to be even more active in next year’s proxy season, starting with heightened offseason approaches and engagement in the second half of 2025. Investors and issuers are settling on how to manage the SEC’s new 13D/G guidelines. The M&A freeze is showing signs of thawing. Consequences from changing tariff policies are better understood and addressed in corporate strategic plans.

To effectively navigate this new era, management teams and Boards should prepare now so they are ready to mount an effective defense if targeted. This should include realistic assessment of vulnerabilities, creative approaches to offseason engagement, better use of the proxy and proactive use of owned channels and digital strategies so your message is delivered unfiltered. Managements must actively address vulnerabilities and any gaps in investor perception of strategy, operations or execution. It has never been more important to ensure investors and all stakeholders clearly understand strategy, metrics and long-term goals.

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